Businessweek Extra - Tilman Fertitta

you here. What inspires you to write a book? And kiddidly a book? This pointed the title alone, shut Up and Listen with the exclamation point. What inspired this? You know, it's really interesting. Harper Collins came to me about eighteen months ago and said, hey, Teman, we've watched your television show. We if we see you on all these business shows and and uh and al, we've seen some stuff with

the Houston Rockets. We read all these articles and you have all these Tillman is ums and all these one liners about how you've been very fortunate and been successful and the tools that you used to be successful. Have you thought about writing a book, and I said, you know, people come to me all the time about writing a life story, and I've always said, I gotta wait till I get a little older, because I really want to go after some people, but I'm still out there doing deals.

They said, that is not what we want. We want a book totally focused in a silo of of what do you do day to day? What separates you from everybody else in your big hospitality entertainment empire. And so that's what happened. They you know, did the outline and we had a lot of fun with it. Right, And so what was the biggest surprise to you in writing the book? Because there is a little there's some introspection in here. There's you know, some some reflection in terms

of understanding what what makes yourself tick? I mean a book is sort of a form of therapy and in some ways of realizing sort of who you are. What what was surprising to you? What? What? What What? What? What got me was when I started sitting down and looking at old notes and had, uh, you know, round tables with my employees have been with me twenty five and

thirty years. Uh, the stuff that I had even forgotten that I said, gosh, this is a great lesson again even for me, but but also the time that we

put into it. Uh, even even HarperCollins said, the amount of time that you've gone through this book and then after it was written, the editing and the editing and the editing that I would take my team and we just go through the book and if I said, if you ever get to a paragraph that you feel like is dragging, we're gonna rewrite that paragraph or we're gonna take it out because I want this book bang bang bang.

That every word means something in this book. Well, and I'm glad you brought that up, because one of the things that really jumps out to me as I read it is your incredible attention, I might even say obsession with detail. You tell some stories about I mean, really getting into it. You know, there's one anecdote about you know, going into a kitchen and you're you realize that the bus boy has been throwing the silverware, and so like you dump it out and you were going piece by

piece through the garbage to pick out the silverware. Is that just a natural instinct that you have to be that detail oriented or is it something you learned it's believing or not. It's it's just the way I am. And and I went to a one of my best friend's house at the CEO of Jeffreys here in New York, Rich Handler, and he was having a party for all these next leaders on Wall Street. So they weren't just

from his company, but from a lot. And there I walk in and the bartender sitting there, and I ordered, uh, Tito's and soda and two lines dash of cranberry, and he goes, I'm sorry, so we're out of lime. Okay, let me have a little cranberry. I'm sorry the cranberries at the other bar out there. And so I had to give him a little lesson in service on the side and and uh kind of gave him more hard time when I talked about everybody. But then I wrote him a nice book. No, give him a side book.

But it's just I can't help but train people and just say this is what you're doing today. I don't care that you're studying to be an actor, but take pride and respect and do your job good okay, and stop telling the damn customer no okay. And that's a big focus in my book. I'm glad you said that, because that was something that really jumped out at me. Especially it seems very twenty nineteen. When all of us are looking for reasons to say no, you essentially say,

start with yes and then figure it out. I'm paraphrasing, but tell me a little bit about that. It's just no matter who you talk to or who you ask or whatever. It just seems like if you just tell somebody know, they just move on. And I try to train all of my people take no out of your vocabulary. You don't have to say yes, okay, but you don't have to say no. And I'm tired of using you know, this one example, but I think it really explains it

better than anything else. It's eleven o two in the morning, you just got off of a business call, you're on a road trip, and you call downstairs to order some brea was from the hotel. I'm sorry, sir, we don't serve breakfast anymore. And you go, okay, that's fine, I understand. I don't want to eggs ben a dickt or a Spanish Omelet just throw a couple of eggs into a skillet and and and scramble them real quick and send them up to me. I'm sorry, sir, we don't serve

breakfast anymore. It's eleven o two. We quit that at eleven o'clock. But if I order a hamburger, you're gonna take that hamburger, Patty and throw it into the skill at the eggs. I promise you were sitting right there in the refrigerator too. It's so easy to say no?

Why say yes? What happened to hospitality? And we're all in the hospitality business no matter if I'm in here with you when you're taking care of me because I'm your guest, or if you're a doctor, a lawyer or anything you do, we're all in the hospitality and service business. Why have we lost that? I don't know. And it's it's like it's just the time and age that we're in and everybody just wants to say no, and and uh,

it's really disappointing. So I try to beat it in my company that you do not tell a customer no. You don't have to say yes, but you don't say no. You just give them a roadmap to get wherever they need to get somehow, all right, So with that incredible attention to detail, I know, you know the numbers of

your business better than anyone. You point that out in your book that that's a key tenant for you as knowing the numbers given that tell us about the consumer right now, because I feel like we have a lot of evidence that the consumer is feeling pretty good. But at the same time, business leaders, you talk to them as well, they're a little cautious. Help me understand that dichotomy or that disconnect. Well, you have to know your numbers.

And I can talk to anybody about their business. They can walk up to me and say, oh, I'm an entrepreneur, I have this company, and I'm truly sixty to ninety seconds, I can tell you if they know what they're talking about and as their business going to be successful because if they know their numbers are not. I mean, you can just wrap it far. And I loved it. I love doing it on my on my television and show Billion Dollar Buyer. And and the world is a little

soft right now. But you've got to remember that history repeats itself. That's the one thing we know. And every five to six years there's always a little bleep and and we've gone now ten years that we have our economy has just been strong as it can be. But the problem is you can only keep growing so fast every year, and then it has to label off, level

off because everybody has already bought. All the cars are gonna buy, all the TVs are gonna buy, all the books are gonna buy sometimes and and uh, it's just leveling off right now. That that doesn't mean it's got to go down and you and and are you gonna have the growth? Maybe not, but as long as you

don't go negative, okay, it'll tremendously help us. But it's definitely soft out there because I see the consumer because I have the highest in and mast Rows and Martins, and then I own Bubba Gumps and Rainforest and and wards like that, and then with casinos everywhere from Vegas to Atlantic City to in between outside of Houston. So I have a really good feel for the consumer because I do over a hundred million customers a year out of my business, right and and so where do you

see pockets of of worry among those consumers? Are people starting to sort of scale back on the high end or does that feel good? Or people starting to scale back in the middle where or if if there is that sort of softening. As you say, where is it. It's a little bit everywhere. You see a little bit at the high end and a little bit and the consumer going to certain suburban stores where I see that with more of my salt grasses and and and concepts

like that. And it's not bad, don't get me wrong, okay, but you just you're not getting that one to two percent three percent positive same store sales every year, which the business people out there all knows a huge measurement and in any consumer business. And so as you think about the new concepts that that you have launched, which are the ones that have surprised you on the upside or or the downside? Uh, it's kind of unbelievable right now that people really love the fast casual and then

they love the super high end. Uh. You know, right here in New York Catch, you know, the seafood restaurant we're just opened to Catch Stay. The Mastro's still heavy, heavy, busy, busy, Martin's busy, busy. But then I still see you know, Bubba Gump on Times Squared, you know, just killing it in Dose Caminos and and Bill's Burgers. You know how in the world do you do so much business selling burgers? But there's really somebody uh to eat everything out there,

believe it or not? Right right, Well, speaking of what you you mentioned burgers, which gives me a good opening, one of the things I really wanted to ask you about is this whole sort of fox meat craze, because you understand the consumer. It feels like this has just come on so strong. What does that tell us about consum Where is desire either for something healthy, something different?

How do you read that sort of pop with a beyond meat on the stock market and what seems to be a lot of excitement if nothing else, well, I think is all companies. I think Wall Street also starting to realize, is that we don't just want revenue like the tech companies. And even the tech companies now how they've kind of thrown up certain ones and and uh but but but investors want earnings now. It's not You're just not gonna do it on hype of revenue. You're

gonna have to make money. And and and we're a fast change in society. And I preach as much as anybody change change, Think change, which I talked about in my book. It's one of my tumin is ms. But at the same time, when you analyze everybody, oh my god, it's it's I'm gonna eat a beyond meat burger because

because it's it's healthier. Well maybe it is healthier in one way, but people don't even look to see that Your average rotein fat burger is I think two thirty calories and beyond meat burgers two undred and seventy calories. And it's it's almost like, through through marketing and media and just talking about it, that people really don't know. And and now but some people who don't want to eat meat, well now you've got this alternative. But that

doesn't mean it's necessarily healthier. It's just maybe because that's that you don't want to eat meat, okay, but it's not proven necessarily that it's healthier. So look around the corner in terms of new concepts. What are people wanting more of that's not out there from a food perspective. Choices, just lots of choices like that. You know that there there's a lot of people that say people aren't gonna eat meat in three hundred years. I find that hard

to believe. Uh, wire, steak, We're still a steak and potatoes world. Okay, I sell so many different steaks that so many different concepts, and as much as people love seafood and and other items, and and there's so many people now eating vegan or whatever, but they're just still seems as long as you have people, you're gonna have each type of people and group of people liking different

types of food. Uh. You know, you mentioned your casino business, and I do wonder it feels like we've had a lot of m and A activity or potential m and a activity out in the sort of real estate, hotel and even the casino world. Some rumors about some things going on out in Vegas. What do you see in terms of the movement in that part of the industry I think is all industries. There continues to be lots of mergers and acquisitions and some companies getting bigger, some

getting smaller. Uh, the the op Co, prop Co, and you know, I don't want to get too far over you know the viewers head here, but but you know where people monetize their real estate and and uh, you know, sometimes I'm really far that sometimes I'm against it, but it's kind of changed the world because it's raised the multiples of what you have to pay right So what are you looking to buy right now? Is that restaurant concepts? Is that other things in hospitality? You've got a blank

check company. I believe that that you launch what what are you seeing out there in terms of potential acquisition? It's kind of funny and and and I talked about this in the book. Is I've always used when things start slowing down as an opportunistic time. And even right now, I just bought a very successful restaurant company out of bankruptcy. I'm gonna probably announce another major restaurant acquisition that I've been working on all week, even though I'm on this

book road show. So I'm seeing the opportunity out there. And and it has nothing to do with the success of the individual restaurants. The individual restaurants are are are very successful. It's just the fact that once again, uh, the old Peter principal poor management has done a very poor job and how they set up the capital structure of these restaurants, or they just did certain major mistakes

at the carpet level. So therefore it's a very opportunistic time for me because that's how I've always grown my network is in bad times. That's why you build liquidity and you build your balance sheet and good times and you don't have to do acquisitions in your good times.

You eat the week and the bad times well. And you point out early in the book, you point out the importance of working capital and sort of having that money available not just to run your business, but but also too, as you say, take advantage of to pay a huge multiple when everybody's trying to do it. Why not wait until there's a dip in the economy, which always happens, and you get a lot more for your money. All right, So, speaking of buying things, you bought a

basketball team not too long ago in your hometown. What's that been? Like? What's surprised you? I keep asking about the surprises, but what surprised you about being a team owner? You know, sports is religion and and especially in Texas, especially in Texas, but really everywhere. And even though you know, like I said, I've I've been doing TV and thanks

for twenty five years. Okay, anything that you say, you all of a sudden you could be a headline on ESPN and and and it's you know, well, how was James and Chris Paul's relationship everything. You've got to be exactly careful are It's not their Howard Russell Westbrook and James Harden' gonna play together now? So so uh, sports is religion religion, You better choose your words right right. Uh?

And so as you've gotten religion around the Rockets and the NBA, you seem to be in the midst of what, by all accounts, is one of the most interesting leagues. It's funny. I was talking to my I have two teenage sons. I was talking to them last night, told him I was going to see you today, and my sixteen year old said, you gotta ask him about the

modern NBA player, social media, social consciousness. As an owner, how do you sort of embrace that and give them the room to be the brands that they are, but also run a successful team. You know, that's really such a such a Uh. Your sixty year is very smart because the NBA is unlike the other leagues that you have these players and and I don't know this for

a fact, but I think I'm right. I bet you if you look at your top fifty most followed athletes in the United States, because there's some in in Uh, in Europe the soccer players that have huge followers. But in the United States, of your four major leagues football, basketball, Baseball, and in the NHL, I bet you forty five of the top fifty or NBA players that they have built this this where they're so big. And part of it is there's only five guys out there start and they're

not wearing a helmet, they're not wearing a hat. The fans sits right there next to them. You get to know their personality. Uh. Where these football players have even been around for fifteen and eighteen years in the league, these quarterbacks, you just never get to know them like you do a basketball player. And and the NBA has done such a great job and I just came from an NBA owners meeting just a few minutes ago, is

of propping up our players. Your players are superstars and and and they do have say so on these teams because I've got a guy like James Harden. Okay, I'm not gonna bring in a Chris Paul or a Russell Westbrook with without sitting down with James Harden and say, James, can you make it work with this guy? Okay? You just gotta have it because there's only five of you, okay, and you're the guys that are gonna make it happen.

And so I think part of it is because they're so close to the fans, and that's why they have the huge social media following. They become such superstars and they make so much money that the top ones in our league, you know, make forty million. I got two of them making forty million. And then they have these huge shoe contracts from Nike and Adida's and under Armour and everybody else, and and uh, it's it's it's uh,

it's it's interesting. But they're all great guys and and uh it's a great thrill to own a team in your hometown. Very few owners even get to experience that, right, Right, How's it changed sort of your day to day life moving around Houston? You have people, I mean, you're well known already and a restaurant tour and an entrepreneur, but when you own the team, that's a little bit of a different thing. And the Rockets are big, you know,

as they are. But from I'm probably the one owner that when they bought their team in their hometown, I mean, it was like they would run polls, who do we want to buy the Rockets? Well, you know seventy, said Tillman Fatita. Just because I happened to have been around so long in my in town and was so so well known, Uh, did it take it uh to another level? Probably so, and everybody is so nice all the time.

But also, just one sixty and fifty three games. I'm gonna have to be hiding if I only ever win thirty three games exactly. What's the biggest thing you've learned from owning a team that you apply back to your day to day business. Well, I probably it's more of what I apply to to the other in the NBA team is is that you still pay attention to the detail.

There are no spare customers. Uh. If you don't put a good product out there, there's too much entertainment dollar in the city of Houston, they're gonna go do something else. So I treat the same thing, whether it be one of my hotels, casinos, restaurant seats, or putting people at a Rocket game at the Tota Center. You better put butts in the seats and you better put a good product. It's kind of funny, but it's no different than the rest of my businesses. Instead of serving good food or

giving them a nice room. You better have good players out there who produce and have a good team, or people are not gonna come. And you know, it's kind funny. I'm into the details. I was walking last year one time and they were having their pre meeting of all

the red coats who helped customers or do whatever. And I stopped them for a minute and and and and talk to them because I love to teach and train, and just you know, reminded them that that people are lost, people don't understand, be patient and let people walk away from the Toyota Center and say, everybody is so nice there, okay, And you just have to remind everybody that that we're we're in the in the hospitality business, no matter if you're sitting at one of my tables, are sleeping. Are

you in the Toyota Center right? Uh? You have been very opportunistic, as you say in your day to day hospitality businesses. Are you planning to be opportunistic as more sports franchises come up? For sound? Uh? What? I love to own more sports for sure? Yeah, Okay, I love sports. Uh. I think the NFL and MLB and NHL and the MLS are great products and and there's never been a sports team for self for US, So I think long term investments. I don't think there's anything any better. Right,

So you could, you could expand. I would love to expand if the opportunity is there. Right before I let you go, Houston, Uh, your hometown is such an interesting sort of economic hotbed. In many ways, it's a much more diverse economy. You and I were talking about this before we came on air. Uh. Then maybe people give it credit for what's the feel in Houston right now. Obviously a Ramco and all of that going on in the Middle East. I'm sure capture all had people's attention.

But you think about the medical center, you think about just the breadth of the city. What's the temperature in Houston right now? Economically, Well, it's kind of interesting because when oil went from you know, around a hundred to down to the thirties and forties. Uh, and now you know, it's been kind of in the fifties now for a long long time. I sat on in this building and another studio said, if oil hits thirty in Houston, you can just shut it down. Well, I can tell you

I was wrong. Okay, Houston has just built right through it. They're still building so many apartments, office buildings, UH malls, shopping centers, lifestyle centers, and and restaurants and hotels and uh it hasn't stopped. So it shows the diversification now

of the UH of the Houston economy. And at the same time, developers have realized that Gosh, going to Houston and buying a piece of property for fifty to a hundred dollars to two hundred dollars of foot is much better than trying to buy it up east for five hundred dollars of foot. So the opportunity cost in Houston. It gets back to the opportunity cost and being opportunistic

is much better in Houston than other markets. Favorite thing about writing this book, UH reminded myself and and I have so many people that that have said, hey, would you mentor me or teach me or whatever? It is all in this book and it is a quick read two and a half three hours. And and uh, I've yet to meet somebody that read the book that when they saw me, he didn't say I'll put the book down and wrote notes right then because I went and did that in my business, or it's somebody just trying

to grow the corporate ladder. It's really simply written. And that was Tillman for Tita, owner the Rockets restaurant tour and now author of the book Shut Up and Listen. You've been listening to Bloomberg Business Week Extra, be sure to tune into Bloomberg Business Week Radio Live Monday through Friday at two pm Wall Street Time on Bloomberg Radio. I'm Jason Kelly. This is Bloomberg